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Starting your own business

If you’re the kind of person who relishes their freedom, dislikes being told what to do and feel you might be better off outside the conventional career structure offered by an employer, you’re quite possibly the perfect candidate to start your own business.

One very big question remains, however: do you have an idea for a new product or service that fills a gap in the market?

If so, you should definitely think about striking out on your own. Your idea could be an invention, or a service that nobody else is offering, in which case you’ll need to seek protection for it at www.ipo.gov.uk. On the other hand, plenty of successful businesses are built on doing exactly what other companies do, only better, faster or cheaper. Take semiconductors, for example: a better solution than vacuum tubes because they are smaller, require less energy and are more reliable. Another option is to form a spin-out company. These are companies that take a technology/IP created in one organisation and form a new one.

Either way, your next move should be to sit down and do some serious thinking. Who are your customers? How are you going to reach them? Who are your competitors? How are you going to stand out from the crowd? What changes might need to happen for you to infiltrate a market? LED light bulbs, for example, took a long time to launch because they didn’t work in standard light fittings. You not only need to understand your competitors but find out what platforms are needed to make sure your product is successful.

Next, think about what your costs are going to be. Consider equipment, premises, staff and vehicles. And how are you going to fund yourself in the start-up stages of your new company?

Finally, what are you going to call yourself? Coming up with a catchy name can really gel all the possibilities into an exciting reality. But make sure no one else is using it (check Companies House), and if you’re aiming for international appeal, check how it translates. The last thing you want six months into a big pan-European push is to find out that your company name means “bottom” in Hungarian.

All of this information will form the basis of your business plan – a key document in the next stage of your start-up: getting funding.

Work out how much you’ll need until your business becomes profitable. Do you have savings of your own that you’re able to invest? Talk to your bank about a start-up loan, business plan in hand, but bear in mind that they aren’t the only possibility. The Prince’s Trust provides finance to start-ups by young people. NESTA also makes grants to certain kinds of businesses. And check out possible government, EU and local authority grants and support at www.businesslink.gov.uk/

If you’re a member of the IOP, you will have access to the Small Business Network on MyIOP where you can talk to like-minded individuals.

You’ll need to think about registering your business. Even if you’re going to be a “sole trader” – where the business is just you – you’ll need to inform the tax man (hmrc.gov.uk). If so, it’s advisable to get a solicitor to draw up a formal agreement. The third option is to set up a limited company, meaning you will effectively be the employee of your own company, and not personally responsible for any debts. This is more costly and complex to set up, but may be worth it in the long run. You can register at Companies House.

Lastly, think about marketing your services. You’ve identified who your customers are, but how are they going to find out about you? Word of mouth is the strongest recommendation, but it’s not much use if no one’s used your services. So think about the websites your potential customers use, the newspapers and magazines they read, the events they attend and the places they go.

Look into promoting yourself there – whether through banner ads or a card on a noticeboard. People will judge you by first impressions, so your publicity materials are an important investment. Make sure your website, leaflets, business cards and other stationary all look crisp and professional and project an image that you’re happy with.

There’s so much more that can be said about running a business, from customer care to keeping the books, staff management to trademarks and copyright. Read: